Aleksandar Marić

Aleksandar Marić

Types of Google Ads costs and differences between them

Using Google Ads we encounter many terms like CPM, CPC, CPV, and CPA. Of course, these are abbreviations for certain costs, but what is their real meaning?

What does an individual cost mean?

When creating a campaign, it is necessary to choose the cost model to be used. If these models are unknown, this creates a problem immediately at the very beginning when creating a campaign. To avoid this, you need to know the difference between the different types of costs.

CPM – Cost per thousand impressions. As the name just says, here, the cost is generated to show 1,000 ad’s ads, regardless of whether they click on them or not, regardless of whether they have seen the same ad, or was shown at the bottom of the page, and the user did not even see it. This kind of cost is good whenever people want more people to see ads, such as a brand awareness campaign;

vCPM – Viewable Cost Per Thousand Impressions – tt works like CPM, but cost only when ads appear in a visible place. Thus, the cost of a vCPM is slightly higher than the cost of CPM;

CPC – Cost per click – As the name suggests, CPC costs only occur when a user clicks on an ad;

CPV – Cost per view – same as CPC, just for Video Ads;

CPA – Cost per acquisition – Cost only occurs when a user does what was the campaign goal – for example, subscribe to a newsletter or make a purchase on the web, ie make a conversion.

Which model of cost to use?

After explaining how an individual model works, the question arises as to which model to use? In order to do so, it is necessary to consider what the user wants to do after seeing the ad. Is it enough to see an ad and get to know the brand? Do you want to click on an ad to take it to the web? Do you want a user to subscribe to a newsletter or create a web account? Do you want to make a purchase? When deciding which campaign goal is, according to explanations of the billing model, the correct model will be chosen.

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